Stamp Duty Land Tax

Chris Curtis Excerpts

Tuesday 28th October 2025 Commons Chamber

[Kit Malthouse (North West Hampshire) (Con)]

I am very sorry to hear about the antipathy of the hon. Member for Pendle and Clitheroe (Jonathan Hinder) towards the south-east. I can assure him that it is not reciprocated, and no doubt the London Members who may or may not be present for this debate will have something to say to him about the wealth and welfare of their residents.

Since this Government were elected, I have often called to mind the famous aphorism uttered by Ronald Reagan about Governments’ approach to the economy:

“If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”

It feels to me as if, with housing in particular, we are moving into the third of those phases. I contemplate with some alarm the idea that in chasing their huge housing target—noble though it is, and shared by the Conservative party—the Government are about to pump enormous subsidies into the housing market in the Budget. That is precisely the wrong thing to do, particularly for a Government who are struggling to create growth in the economy.

What the Government seem to have failed to realise is that if we allow capitalism to function—to do what it is supposed to do—it is brilliant at creating abundance. It has been the single greatest tool for alleviating poverty across the world that humankind has ever known, yet here in this country, Governments—not just this Government but, to my alarm, previous Governments over the past 20 years or so—have not appreciated the formula of incentives required for capitalism to function. It is particularly damaging for it not to function within the housing market, and that is especially salient for the United Kingdom, whose economy is so closely tied to its domestic housing market. Looking at the correlation between the two, it is pretty much one to one: if the housing market is doing well, our economy is doing well, and vice versa. That points to the problem that stamp duty poses.

I want to raise a few points about this motion, as well as to say that I agreed entirely with the shadow Chancellor’s excellent opening speech. First, stamp duty is not a tax on wealth, or even on property; it is a tax on decision making. It skews people’s ability to conduct their life as they wish to, and it deters decisions from being made within the housing market and bungs it up so that it does not work for anybody, wherever in that market they sit and whether or not they pay stamp duty. For capitalism to work—for a market to work—there needs to be lots and lots of transactions. There needs to be fluidity and liquidity. That is what achieves a steady price and creates abundance; people know that they can take a risk in a market, because they will find a counterparty. Scarcity is what raises prices, and that is exactly the position we find ourselves in at the moment. Punitive rates of stamp duty do to the housing market precisely what none of us wants them to do, which is to reward scarcity. They push people into other forms of economic activity, with the result that they cannot fulfil the wishes and aspirations of their family.

[Chris Curtis (Milton Keynes North) (Lab)]

I agree with the right hon. Gentleman about the importance of creating abundance in the housing market. Does he therefore think it was wrong for his party and the Prime Minister at the time to come to my constituency during the general election and campaign against the new homes being built there, which this country so desperately needs?

[Kit Malthouse]

I was Housing Minister for 12 golden months, during which, I am pleased to say, the United Kingdom achieved its highest starts and finishes of housing for 10 years either side—not entirely due to my stewardship, but nevertheless, I will take the credit. I am with the hon. Gentleman in wanting to encourage the building of a significant number of houses, and I am very pleased that large numbers are to be built in my constituency, but they have to be built in the right places. We have to protect our landscape, our countryside and our heritage, while at the same time recognising that many of our market towns need to grow and reach a sustainable size. We can have the houses; they just have to be in the right places.

I also think that we would be able to embrace more housing if we were somehow able to breach the conspiracy of crap. Excuse my language, Madam Deputy Speaker; it is a crass word, but it is a great way of summing up the fact that we are building terribly badly designed houses. There is a conspiracy between planners and the development community to produce ersatz housing across the country, rather than to build beautifully designed houses, as generations of housebuilders did before us. It will not come as a surprise to the hon. Member for Milton Keynes North (Chris Curtis) that in his constituency, as in mine, the most valuable houses—irrespective of size—are often the oldest ones, dating from the Victorian era and even earlier periods. Georgian houses command huge prices, as they are seen as desirable because of their beauty. We can have the houses, as long as we put them in the right places and they look good.

--- Later in debate ---

[Kit Malthouse]

I completely agree with my hon. Friend.

[Chris Curtis]

Back to scarcity again.

[Kit Malthouse]

No, the people best positioned to decide where houses should go are local people. That is why, for many years, I have been a strong proponent of neighbourhood planning. It has been proven time and again that neighbourhood planning produces more houses—15% to 20% more—than other forms of planning, especially local plans. If we get the design right and put power in the hands of local people, they will very often make the right choices, not just for their community but for the next generation.

A point that the shadow Chancellor has made powerfully is that we should recognise that a gummed-up housing market, which is currently stagnating, suppresses the renovation and construction supply chain. When people move house, they invest in redecoration; they invest in extensions, put a new roof on the house, build on the side, and do all sorts of things to their new house that are good, valuable, productive economic activity. At the moment, we are missing out on that activity.

--- Later in debate ---

[Chris Curtis (Milton Keynes North) (Lab)]

I thank the right hon. Gentleman for his speech, and for his fight and campaign within his party in favour of abundance and against scarcity. I hope it is a fight that he can win, given the damage done by there not being enough of that attitude when the Conservatives were in power. Given that this debate cannot be isolated from the issue of the supply of housing, I hope that at the next election, I will not see Conservative leaflet after Conservative leaflet against building the new homes that this country so desperately needs.

I thank the Opposition for bringing forward this debate, and I will start with a few points on which I hope we can agree. Stamp duty is a dreadful tax. It discourages behaviour that we should want to encourage: people moving out of homes that no longer suit them, and into properties that do. As many others have mentioned, stamp duty deters people from downsizing, which means fewer family homes become available for those who need them. In much of London and the south-east, where housing costs are already painfully high, that makes moving almost prohibitively expensive. When, for various reasons, the demand side of the housing market is struggling, stamp duty is also a barrier to building the homes that this country so desperately needs.

When it comes to the drive to campaign against stamp duty, there is a lot to agree with, and we should find a path to removing it. However, I cannot support the motion for two reasons. First, a tax cut of around £9 billion must come with an honest explanation of how it will be paid for, as has been said. If there are apparently tens of billions of pounds-worth of cuts that we could make to the state, we can only conclude that it was pretty negligent of the previous Government not to make them in their 14 years in power. When they were handing out redundancy notices to police officers, why were they not making those cuts instead? Unfunded tax cuts are either a return to Liz Truss or a return to Tory austerity.

There is a second, perhaps more important, point. I fear that the motion’s focus on stamp duty alone is too narrow. As was mentioned, we need a wider conversation about property taxes. The right hon. Member for North West Hampshire (Kit Malthouse) was wrong in one regard. I used to work in market research, and I know that stamp duty and inheritance tax are not the most unpopular taxes; council tax is consistently the most unpopular.

[Bradley Thomas]

Does the hon. Gentleman regret the fact that his Government have not honoured their pre-election promise to reduce council tax?

[Chris Curtis]

I will make some comments about the unfairness of the council tax system in a moment. We can have a conversation about tax and spend, and there is a much wider conversation to have, but today’s debate focuses on a very specific cut in a very specific part of property taxation, and there is a problem with having that conversation in isolation, rather than having the bigger, bolder, politically braver conversation that I would like the Opposition to start about wider reforms of our property tax market.

[Graham Stuart]

I must say that I am encouraged by the hon. Gentleman’s speech. For once, he is not purely engaging in the “14 years of failure” rhetoric of the Labour party. He recognises that stamp duty is a bad tax, and he says that we need a proper, joined-up and deeply-thought-through approach to getting rid of it. Is he pledging to lead such an operation in the Labour party? Given that for the next four years there will be 400-plus Labour MPs, the debate within his party is more important than the one within ours.

[Chris Curtis]

I am glad that the right hon. Gentleman has asked me to comment on the 14 years of Tory failure—years in which his party failed to grow the British economy and created a number of the problems that the country faces. While the shadow Chancellor made many good remarks in his opening speech, there was a little bit of amnesia about the state of affairs that was left to this Government. However, we do need an honest conversation about tax reform, including reform of property taxes.

We have spoken a little about what the Institute for Fiscal Studies has said, and the IFS is right. The UK essentially relies on two big but fairly broken property taxes. Council tax does not create the distortions that stamp duty creates, but it is regressive; stamp duty creates distortions, but it is at least progressive, and mitigates some of the regressive elements of council tax. If we look at only one half of the equation and simply cut stamp duty, we will tilt the system further in favour of the wealthiest households, many of them in London and the south-east, while telling lower and middle-income families elsewhere that there is nothing in the system for them.

We should consider just how unfair council tax has become. Given that the top band is capped so lightly, the bill for a modest family home in the north or the midlands can be similar to that for a multimillion-pound townhouse in London. Paul Johnson, formerly of the IFS, has already been quoted, but let me read out a tweet from him:

“Buckingham Palace, valued at around £1bn, sits in band H and is charged £1,828 by Westminster City Council, less than an average three-bedroom semi in Blackpool...46% of households in England will receive a bigger council-tax bill than the Palace.”

That is clearly a broken tax system, and if we ignore that and focus solely on stamp duty, we will only make things worse.

Moreover, because successive Governments have not had the bravery to revalue, the tax bands are still based on 1991 values. In 1991, Tim Berners-Lee had just invented the world wide web, Nirvana had just released “Nevermind”, Will Smith was filming the first series of “The Fresh Prince of Bel-Air”, and I had not been born. A lot has changed since then, yet we have still not reformed the way in which we carry out council tax valuations. So yes, I agree that we should set a path to reducing stamp duty and ultimately reform the way in which we deal with it, but that should be part of a broader package that shifts tax away from transactions and towards ongoing occupation of higher-value properties. It could include revaluation and re-banding of council tax, so that bills reflect today’s values. There could be a higher rate or surcharge for the most expensive properties, and targeted reliefs to support downsizers and first-time buyers.

[Graham Stuart]

Will the hon. Gentleman give way?

[Chris Curtis]

Yes, go on. Last time.

[Graham Stuart]

The hon. Gentleman is giving a brilliant speech, I must say, and given the energy that he is bringing to it, it “Smells Like Teen Spirit” to me. I agree with most of the points that he made about council tax. It is outrageous what we see when we compare the tax on a small flat in Beverley with that on a multimillion-pound apartment in Westminster. Does he recognise that the cut in business property relief will impose huge costs on businesses, such as house builders, one of which I met last week? If that business was worth £100 million, say, on the death of the owner, the tax would be £20 million, and the person inheriting the business would have to extract £40 million in order to pay it. That house builder told me that for every £40 million taken out of the business, there would be £120 million of investment not made in housing. Does the hon. Gentleman accept that that is a real problem?

[Chris Curtis]

With respect, I think that I have already taken the debate a little bit away from stamp duty, and I do not want to go into the wider tax system—although, as I have said, it is important to broaden the debate and engage in a wider conversation about property taxes, as I have tried to do. If the Opposition genuinely want to remove stamp duty, I invite them to engage in that wider conversation in good faith. If we want to remove costs at the point of transaction for those buying high-value homes, it is only fair to ask them to contribute more through day-to-day charges. Such a system would be fairer, would support mobility, and would meet the objectives that I think are shared by Members on both sides of the House: a housing market that works, more building, and a tax system that is both pro-growth and fiscally responsible.